This guide provides a summary of the safeguards that are in place to protect your Pension Account within the SEI Master Trust.
What is the SEI Master Trust?
It’s a large, professionally run, multi-employer pension scheme which is authorised and supervised by the Pensions Regulator. Each employer has their own section within the SEI Master Trust.
All money paid in is put into individual pension accounts and kept separate from your employer. It’s held on your behalf by the Trustee. The SEI Master Trust is looked after by a trustee company, SEI Trustees Limited. The trustee company has a board of directors who look after the Scheme, and it’s their role to make sure that the Master Trust is run properly and in the best interest of the members.
How do we keep your pension account protected?
You work hard to build up your pension savings, so it’s important to make sure your Pension Account is safe. It’s also important to note that the value of your Pension Account can go up or down over time depending on how your investments perform. The SEI Master Trust uses the Scottish Widows platform to manage, buy and sell our investment assets via a long-term insurance policy. Scottish Widows is authorised by the Prudential Regulatory Authority (PRA) and regulated by the Financial Conduct Authority (FCA).
The Financial Services Compensation Scheme (FSCS) is an independent government organisation that offers protection in the event of the failure of a regulated financial services company, such as Scottish Widows. The Trustee’s insurance policy should be covered by the FSCS for 100% of any claim, with no upper limit.
This would mean that, in the very unlikely event that funds were not accessible, the FSCS could pay compensation to policy holders. This can be used in the event that Scottish Widows is unable to pay or meet its liabilities. However, we can confirm that no large Master Trust has yet had to make a claim.
In the event that a claim is required, this would be undertaken by SEI Trustees Limited on behalf of the Scheme as a whole.
You may also have seen that some of the individual self-select funds are re-insured funds. This is where a company such as Scottish Widows buys insurance from another company to mitigate the risk of a major claim. The funds are currently invested with Scottish Widows (part of Lloyds Banking Group, with over £1 trillion in assets under management) which should provide some comfort, as there is only a remote possibility of these institutions becoming insolvent.
The SEI Master Trust is ‘authorised’, which means that the Pensions Regulator undertakes a continuous review. This review includes regular reporting, random spot checks on those running the scheme and event reporting such as any fraud suspicion.
The Pensions Regulator requires master trusts to have independent trustees. As such, these trustees are legally obliged to act in the best interests of members, and they will oversee investments, administration and ensure governance standards are upheld.
Master Trusts are required to have a continuity strategy and a wind-up plan. This means that if the trust fails or decides to close, your pension must be transferred safely elsewhere and its members must be protected from being stranded in the existing Trust.
Go to the documents page to find the SIP and Implementation Statement.
As part of its ongoing supervision and review of information, the Pensions Regulator has the power to launch investigations, issue fines, appoint independent Trustees or remove existing ones, report to the FCA or the police for criminal activity, or even force the scheme to wind up and protect members’ assets during the process.
Your pension account is separate from your employer. Within the SEI Master Trust these assets are not available to any creditors, or to meet any debts, that your employer may have. So, if your employing company went bankrupt, the money paid into your pension account would be safe and wouldn’t be affected.
A modern-day threat to pensions is pension scams, which aim to trick people into transferring their pensions to fake or high-risk schemes. As an authorised Master Trust, we comply with the Pensions Regulator pension scams warnings campaigns and pledge to combat pension scams.
To ensure the safety of your money, each pension transfer requires specific information to be provided which aligns with the Pensions Regulator transfer code of practice.
Whilst we appreciate that these forms and confirmations can sometimes be arduous to complete, they are there to safeguard your pension, and reduce the risk of being caught out by a pension scam.
Within our transfer and retirement packs, we include a leaflet and literature to make you aware of pension scams and what to look out for. In addition, and part of the reason that pension transfers are not like an online bank transfer, we go through rigorous identification steps and confirmations to ensure the safety of your pension.
As part of our pension transfer process, the SEI Master Trust administration team uses Origo, who allow for pension transfers requests to be submitted electronically to UK approved pension arrangements, ensuring even more safeguards are in place.